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June 21, 2011

Court Rules Plaintiffs’ Claims Too Lean In Hydroxycut Class Action

A federal judge recently dismissed a putative class action against the manufacturers and retailers of Hydroxycut, finding that the plaintiffs failed to plead their allegations with the level of particularity required under the Federal Rules. Representing a nationwide class of “all persons who purchased Hydroxycut-branded products,” the plaintiffs alleged violations of various state consumer protection laws, breach of warranty, and unjust enrichment. The complaint, filed December 22, 2009, sought to hold liable not only the makers of Hydroxycut, but also several national retailers that sold the weight-loss products. The dismissal highlights the increased difficulty plaintiffs face in challenging advertising as false and misleading where plaintiffs do not have the particular details to support each of their claims. It also has implications for retailers who make representations about the products they sell.

The plaintiffs did not allege any physical injury stemming from their use of the Hydroxycut products. Rather, the plaintiffs claimed that the products were marketed as safe and effective, when later reports suggested those claims to be untrue. Among other reports, the complaint cited a 2009 FDA press release that warned consumers to discontinue using the products due to reported health concerns. Plaintiffs claimed that they failed to get the benefit of their bargain when they purchased what they believed to be a safe and effective weight-loss product, but later learned of the products’ negative health implications. The court denied the defendants’ motion to dismiss on standing grounds, finding this type of economic injury was sufficient at the pleading stage.

In line with a trend that we have previously reported on, the court construed the plaintiffs’ misleading advertising claims as being “sounded in fraud” and thus subject to the higher pleading standard of Rule 9. That standard requires the plaintiffs to explain the who, what, where, when, and how of the alleged misrepresentations. Importantly, that standard does not permit plaintiffs to lump multiple defendants together -- instead, plaintiffs must differentiate their allegations among the multiple parties being sued. In this case, although the complaint stated that the plaintiffs were exposed to and read defendants’ advertising claims, the complaint failed to allege the specific representation that each of the 20 named plaintiffs saw or read. In addition, although the complaint provided examples of some of the defendants’ representations that were made online, on television, and on the product packaging, the plaintiffs failed to describe whether those same representations were made on each of the 14 Hydroxycut products covered by the complaint. Such barebones allegations, according to the court, were insufficient under the Federal Rules.

The complaint also attempted to hold several retailers, including national drug and vitamin chains as responsible for the underlying representations of the Hydroxycut maker. With one exception, the retailers did nothing but place the Hydroxycut products on the shelf. According to the court, that conduct alone was insufficient to hold the retailers liable under the plaintiffs’ consumer protection, warranty, and unjust enrichment claims. Unless the retailers had participated in, controlled, or adopted the allegedly misleading advertising, the claims against the retailers failed.

The only allegation that a retailer promoted or marketed the products concerned statements made on one vitamin seller’s website. According to the complaint, these representations included claims that Hydroxycut was “the most extraordinary powerful fat burner ever developed” and that it contained “key components that have been scientifically proven to help you lose weight fast.” The court ultimately dismissed the claims against the retailer because the complaint failed to state which plaintiffs, if any, had seen these specific representations on the website or had relied on them in purchasing the product. Nevertheless, because the court acknowledged that these representations “could potentially support a consumer protection claim,” the court’s order should serve as a reminder to retailers to tread cautiously when making claims about the products they sell.

As to both the manufacturers and the retailers, the court’s dismissal gives the plaintiffs another chance to fatten up their claims.